Aeron Composite Limited IPO Review

Aeron Composite Limited was established with aim of manufacturing pioneer product made out of FRP/GRP(Fibre Reinforced Composites) for industrial and recreational use. AERON offers High-quality advanced composite solutions and reliable services, complying with customer specifications as well as various National and International standards. 

The Company is managed by Promoters - Chirag Chandulal Patel, Dilipkumar Ratilal Patel, Pankaj Shantilal Dadhaniya and Ravi Pankajkumar Patel. Chirag Chandulal Patel (Managing director of the company) is responsible for complete production and operational activities of the company and is having an experience of 03 years in this industry. Dilipkumar Ratilal Patel (Chairman and Non-Executive Director of our Company) is having an experience of more than 13 years and is playing vital role in formulating business strategies and effective implementation of the same.

Financially, Aeron Composite revenue jumped from ₹7906.12 Lakhs in FY21 to ₹10992.50 Lakhs in FY22 to ₹18199.26 Lakhs in FY23 and currently at ₹18080.35 Lakhs in 11MFY24. Similarly, EBITDA also increased from ₹652.66 Lakhs in FY21 to ₹782.64 Lakhs in FY22 to ₹1277.93 Lakhs in FY23 and currently at ₹1648.02 Lakhs in 11MFY24. The PAT increased from ₹255.30 Lakhs in FY21 to ₹362.12 Lakhs in FY22 to ₹661.15 Lakhs in FY23 and currently at ₹942.23 Lakhs in 11MFY24. This indicates a steady growth in financial performance.

For the Aeron Composite IPO, the company is issuing shares at a pre-issue EPS of ₹7.52 and a post-issue EPS of ₹5.54. The pre-issue P/E ratio is 16.62x, while the post-issue P/E ratio is 22.56x. The company's ROCE for 11MFY24 is 29.67% and ROE for 11MFY24 is 31.33%. These metrics suggest that the IPO is fairly priced.

The Grey Market Premium (GMP) of Aeron Composite indicates potential listing gains of 10% - 16%. Given the company's financial performance and the valuation of the IPO, we recommend Investors to Avoid the Aeron Composite Limited IPO for Listing gain or long term investment purposes.